B-174678, MAY 31, 1972

B-174678: May 31, 1972

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IT IS THE OPINION OF THE COMP. FOR WHICH ITS BID WAS PROPERLY REJECTED AS NONRESPONSIVE. THERE EXISTS NO EVIDENCE TO SUPPORT PROTESTANT'S CONTENTION THAT OTHER BIDDERS WERE ALLOWED TO MAKE THEIR BIDS RESPONSIVE AFTER BID OPENING. TO GENERAL ELECTRIC COMPANY: REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 2. BIDS FOR THE GENERATORS WERE INITIALLY SOLICITED IN JULY 1971. WERE REJECTED AS NONRESPONSIVE BY THE ROYAL GOVERNMENT OF AFGHANISTAN (OWNER). A REVISED BID CLOSING DATE WAS SCHEDULED FOR OCTOBER 19. WERE RECEIVED ON OCTOBER 19. WAS NOT INTENDED TO TAKE ANY EXCEPTION TO THE PAYMENT PROVISIONS IN THE INVITATION. AID AND THE CONSULTING ENGINEERS FOUND THAT THE "TERMS OF PAYMENT" ARTICLE IN THE LETTER ACCOMPANYING YOUR BID IMPOSED STRICTER CONDITIONS ON THE OWNER THAN WAS PROVIDED FOR IN THE INVITATION.

B-174678, MAY 31, 1972

BID PROTEST - NONRESPONSIVENESS - ALLEGED IMPROPER PROCUREMENT DECISION DENYING THE PROTEST OF THE GENERAL ELECTRIC COMPANY (G.E.) AGAINST REJECTION OF ITS BID FOR GENERATORS FOR THE KAJAKAI HYDROELECTRIC PROJECT, AFGHANISTAN, FINANCED BY A LOAN FROM THE AGENCY FOR INTERNATIONAL DEVELOPMENT (AID). IT IS THE OPINION OF THE COMP. GEN. THAT THE "TERMS OF PAYMENT" SUBMITTED BY G.E. REPRESENTED A MATERIAL BID MODIFICATION, AS DEFINED BY SECTION 2.6A OF THE AID CAPITAL PROJECTS GUIDELINES, FOR WHICH ITS BID WAS PROPERLY REJECTED AS NONRESPONSIVE. FURTHER, THERE EXISTS NO EVIDENCE TO SUPPORT PROTESTANT'S CONTENTION THAT OTHER BIDDERS WERE ALLOWED TO MAKE THEIR BIDS RESPONSIVE AFTER BID OPENING. ACCORDINGLY, THE PROTEST MUST BE DENIED.

TO GENERAL ELECTRIC COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 2, 1971, WITH ENCLOSURE, AND LETTER OF FEBRUARY 4, 1972, PROTESTING AGAINST THE REJECTION OF YOUR BID FOR HYDROELECTRIC GENERATORS FOR THE KAJAKAI HYDROELECTRIC PROJECT, AFGHANISTAN, FINANCED UNDER AGENCY FOR INTERNATIONAL DEVELOPMENT (AID) LOAN NO. 306-H-013.

BIDS FOR THE GENERATORS WERE INITIALLY SOLICITED IN JULY 1971, BUT WERE REJECTED AS NONRESPONSIVE BY THE ROYAL GOVERNMENT OF AFGHANISTAN (OWNER). ADDENDUM NO. 2, DATED OCTOBER 1, 1971, MADE CERTAIN SPECIFICATION CHANGES AND CLARIFICATIONS, AND A REVISED BID CLOSING DATE WAS SCHEDULED FOR OCTOBER 19, 1971.

THE FOLLOWING BIDS BASED ON THE TOTAL CIF COSTS FOR THE GENERATORS FOR KARACHI, WEST PAKISTAN, AND KHORRAMSHAR, IRAN, WERE RECEIVED ON OCTOBER 19, 1971:

GENERAL ELECTRIC $2,840,206

WESTINGHOUSE 2,907,976

ALLIS-CHALMERS 2,969,480

THE COVER LETTER WITH YOUR BID DATED OCTOBER 13, 1971, MADE CERTAIN STATEMENTS WITH RESPECT TO THE TERMS OF PAYMENT. BY YOUR LETTER OF OCTOBER 21, 1971, TO THE CONSULTING ENGINEERS YOU CLARIFIED CERTAIN DISCREPANCIES IN YOUR BID, AND ALSO ADVISED THAT THE LETTER OF OCTOBER 13, 1971, WAS NOT INTENDED TO TAKE ANY EXCEPTION TO THE PAYMENT PROVISIONS IN THE INVITATION.

AID AND THE CONSULTING ENGINEERS FOUND THAT THE "TERMS OF PAYMENT" ARTICLE IN THE LETTER ACCOMPANYING YOUR BID IMPOSED STRICTER CONDITIONS ON THE OWNER THAN WAS PROVIDED FOR IN THE INVITATION. FOR EXAMPLE, YOUR COVER LETTER REQUIRED THAT THE PURCHASER SHALL ESTABLISH AN IRREVOCABLE LETTER OF CREDIT WITHIN 15 DAYS AFTER CONTRACT AWARD WHEREAS UNDER THE IFB THE PURCHASER HAD A REASONABLE TIME TO ESTABLISH AN IRREVOCABLE LETTER OF CREDIT. PRESUMABLY THE REASONABLE PERIOD WOULD EXCEED 15 DAYS SINCE FOR ADMINISTRATIVE REASONS IT WOULD BE EXTREMELY DIFFICULT FOR THE OWNER TO OBTAIN SUCH A LETTER OF CREDIT WITHIN THE 15 DAY PERIOD. AID ALSO FOUND THAT THE COVER LETTER VARIED THE TERMS AND DOCUMENTATION REQUIRED FOR INSTALLMENT PAYMENTS. UNDER THE IFB, INSTALLMENT PAYMENTS ARE BASED ON THE SIGNED RECEIPT BY THE OWNER OF THE EQUIPMENT OR MATERIALS. THE GE BID PROVISION CALLS FOR PAYMENT WITHIN A GIVEN TIME AFTER DELIVERY POINT OF MANUFACTURE OR STORAGE WITHOUT REGARD TO RECEIPT BY THE OWNER. YOUR BID ALSO IMPOSED CANCELLATION CHARGES INCONSISTENT WITH THE IFB TERMS. UNDER YOUR BID THE OWNER'S FAILURE TO COMPLY WITH YOUR TERMS OF PAYMENT WOULD ENTITLE YOU TO SUSPEND PERFORMANCE AND UNILATERALLY CHARGE ANY ADDITIONAL COSTS THEREBY INCURRED BY THE SELLER TO THE CONTRACT PRICE. AID ALSO FINDS THIS PROVISION INCONSISTENT WITH THE IFB TERMS WHICH PROVIDE NO SUCH UNILATERAL RIGHT TO THE SELLER. THERE ARE OTHER EXCEPTIONS WHICH NEED NOT BE CONSIDERED HERE.

YOU CONTEND THAT THE STATEMENTS IN THE LETTER WERE CONSISTENT WITH THE TERMS OF THE INVITATION READ IN LIGHT OF THE PROVISIONS OF THE AID CAPITAL PROJECTS GUIDELINES. AID POINTS OUT, HOWEVER, THAT THE GUIDELINES WERE NOT A PART OF THE BIDDING DOCUMENTS AND, IN ANY CASE, IT FINDS THAT YOUR STATEMENTS WOULD BE EXCEPTIONS TO THE GUIDELINE REQUIREMENTS.

SECTION 2.6.A OF THE AID CAPITAL PROJECTS GUIDELINES PROVIDES IN EFFECT THAT A MATERIAL BID MODIFICATION RENDERING THE BID NONRESPONSIVE IS ONE WHICH LIMITS IN ANY WAY THE RESPONSIBILITIES, DUTIES, OR LIABILITIES OF THE BIDDER OR ANY RIGHTS OF THE BORROWER OR AID AS SPECIFIED IN THE IFB. THE EXCEPTIONS NOTED ABOVE ARE CLEARLY MATERIAL WITHIN THE RULE, THEREFORE, WE FIND YOUR BID WAS PROPERLY REJECTED. ANY OBJECTIONS YOU MAY HAVE HAD TO THE TERMS OF THE IFB OR ANY SUGGESTIONS FOR THEIR IMPROVEMENT SHOULD HAVE BEEN MADE KNOWN PRIOR TO THE TIME FOR BID SUBMISSION WHEN THEY COULD HAVE BEEN CONSIDERED FOR INCLUSION BY AMENDMENT.

WITH RESPECT TO YOUR CONTENTION IN THE LETTER OF FEBRUARY 4, 1972, THAT THE OTHER BIDDERS (WESTINGHOUSE AND ALLIS-CHALMERS) WERE GIVEN THE OPPORTUNITY TO MAKE THEIR BIDS RESPONSIVE AFTER BID OPENING, AID'S SUPPLEMENTAL REPORT STATES AS FOLLOWS:

"A.I.D. INITIALLY DETERMINED THAT THE WESTINGHOUSE BID WAS NONRESPONSIVE. THIS WAS BASED UPON A REVIEW OF DOCUMENTS FORWARDED TO A.I.D. BY IECO (CONSULTING ENGINEERS) WHICH DID NOT CONTAIN THE ENTIRE WESTINGHOUSE BID PACKAGE. WHEN THE COMPLETE DOCUMENTATION WAS SUBMITTED TO A.I.D., IT WAS CLEAR THAT THE WESTINGHOUSE BID WAS, IN FACT, RESPONSIVE.

"PRIOR TO THIS DETERMINATION THE OWNER HAD INITIATED DISCUSSIONS WITH A- C, THEN THOUGHT TO BE THE LOWEST RESPONSIVE BIDDER. UPON BEING INFORMED THAT A-C WAS NOT THE LOWEST RESPONSIVE BIDDER, THE OWNER TERMINATED SUCH DISCUSSIONS WITH A-C. *** "

THERE IS NOTHING IN THE RECORD WHICH WOULD ESTABLISH YOUR CONTENTION ON THIS ISSUE. AWARD WAS MADE TO WESTINGHOUSE ON MARCH 13, 1972.

FOR THESE REASONS, YOUR PROTEST IS DENIED.